Facts about the Great Depression

Some facts about the Great Depression which give a brief account of the chaotic condition that prevailed in the world, especially in the United States, when this economic crisis occurred.

The Great Depression was a period of 12 years between 1929 and 1933, typically characterized by an economic depression and mass unemployment in the entire world. Economists cite numerous reasons for the occurrence of this economic crisis, right from a weak banking system to the government-held Laissez-faire policy.

Irrespective of what its causes were, one thing was obvious: it gave a severe jolt to the world economy, the repercussions of which we are feeling even today. The fact that a large section of the society doesn't know much about this period comes as a surprise in itself, considering that it's not even been 100 years since it occurred.

The Great Depression in the 1930s

The then US President, Herbert Hoover used the term 'depression' to refer to this economic crisis in his speeches time and again. However, the term was formally used for the first time in British economist Lionel Robbins' book titled The Great Depression.

In the first week of the Great Depression itself the US economy lost $30 billion dollars; $14 billions dollars of which were lost on one single day―the Black Tuesday.

The economy of Canada was the second worst affected in the world, with a fall of 56 percent from the 1929 level. The unemployment rate in Canada reached the highest of 27 percent in 1933.

The global trade collapsed as a result of several countries coming up with their own legislation in reply to the Smoot-Hawley Tariff Act passed by the US government, thus adding to the woes of depression.

In 1930, President Hoover made the rather infamous speech stating that the "worst was over". The fact though, was that the problems for the US as well as the world economy had just begun.

A severe drought in the United States in 1930s made life even more difficult, displacing as many as 500,000 people from Texas, Oklahoma, and the surrounding Great Plains.

The average annual income of an American family was reduced to $1500 from $2300―a decline of whopping 40 percent―during the Great depression.

Within a year since the depression began as many as 3,000,000 children were forced to quit school owing to economic crisis that the American families were subjected to.

Among the various effects of the Depression, one noteworthy development was the replacement of classic economic liberal approaches with Keynesian policies in the United States.

Some economists are of the belief that the actual depression lasted only for four years between 1929 and 1933, and the rest of the period was actually the recovery phase which started rather slowly.

The depression was not bad for everyone though, as many people (including Joseph P. Kennedy) amassed enormous amount of wealth in the field of real estate during this period.

A Few More Facts Worth Knowing ...

One of the main causes of this financial crisis was the Wall Street Crash of 1929.

During the Great Depression, all the major countries of the world were forced to abandon the gold standard in order to print more money.

Even though the Depression lasted for 12 years, it took 27 whole years for the US Economy to reach the pre-cash levels after the stock market crash of 1929.

Such was the impact of this economic depression that by 1932, i.e., within 3 years of the beginning of this crisis, 40 percent of the American banks had failed.

Unemployment was yet another crisis that the United States was subjected to during this period; it reached its highest point of 25 percent in 1933.

As desperate measures of providing jobs to the citizens, several structures such as the Empire State Building and Golden Gate Bridge were commissioned by the US government during this period.

The Great Depression finally came to an end with the beginning of the World War 2, which created several job opportunities across the world.

The Great Depression of 1930s was the most severe economic crisis that affected the world back then; 'back then' because many scholars are of the opinion that the situation during the economic crisis of 2009 was more severe than the same in 1930s.